The construction industry is a competitive, but highly lucrative field. With recent funding for more infrastructure projects on a federal level, and more construction happening in the private sector, 2022 is shaping up to be a fantastic year for construction businesses. If you’ve been working as a contractor, but have always dreamt of starting and owning your own construction business, 2022 is a perfect year to do so. To get you started on your road from being an employee to being an employer, here are ten steps to start your own construction business:
1. Research and Understand the Construction Industry
Looking into the construction industry in the area you’ll be working out of is critical to running a successful, new construction business. Looking into the expected costs, needed documentation, potential projects, and much, much more will become critical during this step. Thankfully, there are more websites and support materials to help you put together a solid business research report than ever before, so tackling this step is highly accessible.
2. Create a Business Plan
Once you’ve done your research, it’s time to start crafting a specific, highly-detailed business plan. By having a business plan in place before you begin starting the company’s financial tasks, you’ll be more likely to succeed. There are many details you should cover in your business plan, but some of the most important include: products and services intended, financial plans and projections, business structure, market analysis, executive summaries, marketing plans, and company overviews.
3. Register Your New Construction Company
The next step will see you making your business a fully legit, legal, and registered company with your state and local governments. Registering as either an LLC or a corporation will help keep you legally protected, and ready to make a massive profit. The personal benefits, legal protection, tax benefits, and legitimacy this will bring to your new construction company are invaluable. Registering at a federal level can help you receive a federal tax ID as well, which will give you the ability to trademark your company and logo.
4. Obtain All Necessary Licenses, Permits, and Certifications
Before you can make a profit, you need to ensure you’re doing business in a fully safe and legal manner. To do so, obtaining all the necessary licenses required by the state you’re working in becomes crucial. State by state requirements can vary wildly, and if you’re handling multi-state projects, the needed documentation and permits can become even more complex (so being sure you’re legally protected becomes that much more important). With federal certifications, you can even gain lucrative government contracts (which are more plentiful with increased infrastructure spending in 2022). Having a specialty contractor’s license, and a general contractor’s license become the bare minimum you’ll need before starting work.
5. Get the Best Insurance Available
All responsible businesses understand how important insurance is. Accidents happen and being prepared to keep everyone financially and physically healthy post-accident is crucial. Additionally, some types of business insurance can help protect your profits in case unforeseen obstacles cause damage to your company. The four most important types of insurance you’ll need are vehicle insurance, worker’s compensation insurance, property insurance, and general liability insurance.
6. Secure All the Funding You’ll Need
Now that you have all the legal and business materials you’ll need under your belt, it’s time to begin considering the next start-up steps in the company construction process. Funding is the hardest aspect of getting a business up and going, but it will ensure your business can run in a smooth, profitable manner. Funds can be used to either rent or buy all the equipment your construction company will need and will help you cover employee wages as well. There are tons of amazing funding opportunities that small business owners can take advantage of, including equipment loans, purchase order financing, working capital loans, vendor financing, and small business loans.
7. Craft a Marketing Strategy
Once your company is ready to operate, you’ll need to form a marketing plan that will ensure your community is aware that you’re ready for business. Finding ways to advertise online and in the real world is key, as it will open your business up to a wide variety of money-making opportunities. Finding partners within the already-existing construction business landscape in your area can help you find leads on projects as well.
8. Gather Your Team
No business can function without a tightly-knit, professional working team. As a construction company, understanding all of the multi-talented, certified workers you’ll need under your belt is key to your company’s success. Depending on what area of construction your business is specializing in, the hiring needs you’ll have will vary wildly. The more contractors you have working for you, or simply available to call upon, the wider your net will be for gaining lucrative projects to work on.
9. Obtain All the Equipment Your Company Will Need
There will always be base equipment your company will need to function as a construction business. Then, depending on the types of projects you work on, more specialized equipment may be needed. Discovering which equipment is needed, and then deciding whether it would be more financially sound to rent or outright buy that equipment, will become one of the final steps you’ll need to tackle when starting your own construction business.
10. Find Your First Projects
Now that you have all the behind-the-scenes business steps taken care of, only one step remains: finding the projects that will help you define the reputation and profitability of your new construction company. The road can be tough, but with the right grit, determination, and working spirit, you’ll find yourself making tons of money in the contracting industry in no time. Being flexible, and always remembering to treat your employees and customers with the utmost respect will help you stay successful in the years to come.
Your Future is Looking Profitable
Thanks to the recent surge in construction interests, there’s rarely been a better time than now to follow your dreams of starting your very own construction business. With these ten steps, following your dream career path becomes that much easier. If you approach each step with focus, knowledge, and humility, you’ll find yourself owning a construction business in no time.